TAA renews calls for exiting institutions to pay ASIC Levy

From

Neil Macdonald

The Advisers Association (TAA) is renewing calls for major banks and institutions that have exited or are intending to exit financial advice to pay their share of regulatory costs.

The call comes following the 23 July 2021 publication of ASIC’s draft Cost Recovery Implementation Statement (CRIS)[1] for 2020-21, which detailed that the ASIC Adviser Levy is set to increase to $3,138 per adviser. ASIC is taking stakeholder feedback on the draft CRIS, with submissions due 13 August 2021.

TAA CEO Neil Macdonald said, “Like others in the industry, we have grave concerns about the ever-increasing financial burden being imposed on small business advisers and ultimately their clients.”

TAA is renewing its call for the Government to rethink the industry funding model in relation to financial advice. “We understand that ASIC’s hands are tied in relation to cost recovery, and we are not opposed to a user-pays model, however the users who caused the current regulatory cost burden are not being made to pay for it,” Mr Macdonald said. “By exiting advice the big banks, despite being largely responsible for some of the poorest behaviours, are able to avoid paying.”

Earlier this year, TAA suggested imposing an exit fee on the major banks and institutions that have jettisoned their advice networks or are in the process of doing so. TAA suggested a fee calculated as a three-year multiple of the ASIC Adviser Levy, per adviser, based on the institution’s adviser numbers, as at the date of the Hayne Royal Commission report.

“At $3,138 per adviser, this would put the fee for those institutions at almost $10,000 per adviser,” he said. “As we said earlier this year, expecting small business advisers and ultimately their clients to keep paying ever-increasing costs for the sins of the past, largely committed by the big end of town, is unconscionable,” Mr Macdonald said.

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[1] https://asic.gov.au/media/t11lcizv/cris-asic-industry-funding-model-2020-21-for-feedback-published-23-july-2021-20210728.pdf

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